Are You Falling for a Debt Consolidation Loan Scam? Here’s How to Tell

Running a successful business today is not for the faint hearted. You have to be very creative to compete at a global level. The increase in the cost of operations makes things harder and it is no wonder many companies are forced to go on a borrowing spree hoping to stabilize things with time. Research now shows that most small businesses fail due to cash flow issues and if you are grappling with mounting debt, it is time to take action.

Debt Relief through Loan Consolidation

It is understandable that when things are tough, a loan seems like the easiest option to stabilize things.  Most businesses grow on debt before fully stabilizing but if things are not looking up, you need to act sooner than later. A business debt consolidation loan is one of the best solutions out of spiraling debt. This is a financial method where you buy a new loan to pay off your smaller debts. This leaves you with a single loan to deal with.

There are many debt relief companies offering legal debt consolidation services. However, there are still unscrupulous operators who want to take advantage of your situation to lure you into a scam. What is advertised in glowing terms as debt relief ends up being a burden? In fact, many business owners have lost money and ruined their credit profiles in the belief that they are getting debt relief.

If you are looking for debt consolidation services, look out for the following warning signs which point to a scam:

1. No Physical Address or Contacts

If a company is not willing to disclose its physical location, it is highly likely it is a scam run by shady individuals. They will close shop and move on to the next scam once they have swindled as many unsuspecting businesses as possible.

2. No Licensing or Registration

If the debt consolidation service is not registered with the National Foundation of Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies, don’t sign up.  More importantly, if they are not licensed to lend money, you should not risk working with them.

3. Unclear Debt Consolidation Services

The service offered by a debt consolidation service is simple; financing. The company evaluates your financial situation and buys all your debts. If the company starts selling you any other financial solutions, run and don’t look back. Any hint of negotiations with your creditors should ring the alarm bells. You should never agree to a service that you didn’t want in the first place.

4. Pushy and Aggressive Marketing

If a debt consolidation company is too pushy and keeps calling for your signature, it is time to cut all communication. Most scams use aggressive marketing to give themselves credibility and this is how they lure unsuspecting business owners; after all, can a company that is too visible turn into a scam? Remember you are the one to approach the debt consolidation company and if it happens the other way, this should raise a flag.

If a debt consolidation loan company promises to wipe away all your debt, don’t trust them because this can never happen. If they make you feel uncomfortable, just walk away. You could be saving your business.

Share this post